Open Text, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Seth Gilbert CFA from UBS reiterated a Hold rating on the stock and has a $38.00 price target.
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Seth Gilbert CFA has given his Hold rating due to a combination of factors related to Open Text’s current strategic position and market uncertainties. The company is transitioning towards cloud solutions, but this shift is largely customer-driven rather than being actively pushed by Open Text. This indicates a cautious approach to cloud adoption, which aligns with recent earnings calls. Additionally, while there is growing interest in Open Text’s AI offerings, overall customer spending remains conservative, with AI initiatives being a potential catalyst for future budget increases.
Another significant factor contributing to the Hold rating is the anticipated appointment of a new CEO, which introduces uncertainty regarding future strategic priorities. There is also ambiguity surrounding the timing of non-core asset divestitures and clarity on revenue growth, particularly during the transition from on-premises to cloud solutions. Furthermore, Open Text’s current trading valuation is slightly above its peers, which, combined with these uncertainties, supports maintaining a Neutral stance on the stock.
In another report released on November 7, CIBC also maintained a Hold rating on the stock with a $40.00 price target.